It seems that almost everyone has a credit card these days, right? They are so much easier to use than cash or checks. But what many people don’t realize is that using your credit card loans can even be used to MAKE MONEY!
First, let’s start with the basics, and then get into the more complex. This article is a bit lengthy, so sit back and relax. Also, let me add a disclaimer that you should always follow all applicable laws and credit card loan agreements, and I have no idea if any of this would affect something like your credit rating. But nevertheless, here it goes:
How to Make Money by Using a Credit Card (Loan)
If you use your credit card, you could actually make money. I am sure you are probably familiar with how a credit card works. Companies charge interest and other various fees in exchange for the flexibility to have a loan at any time. But if you know a couple of tricks, using your card can help you to make some money on purchases. Here is how:Make Money From Credit Cards by Joining Programs to Earn Points, Cash Back, and Rewards
This is a simple one, but many people don’t realize that most reputable credit card companies will offer a rewards, cash back, or points program. So making money in this way is pretty simple. All you have to do is join (or sign up) for the credit card companies rewards program. Many programs will offer $1 for every $1 you spend, or 5% cash back, etc. There are many different programs, but the point is that you can earn money (or points that you can use to redeem money or gift cards).So in this deal, you simply use your card to buy the stuff you need to buy each month (groceries, gas, entertainment, etc.). Then, you will be earning points, cash, or rewards that you can redeem. BAM- easy money. However, the thing you want to watch out for is getting trapped by high interest rates or fees. Instead, apply for a credit card program with a good grace period before the interest starts to apply. For example, if your card has a 30 day grace period, you can use your card, and then pay the balance in full as soon as you receive your bill. Easy money! Just don’t keep a balance or get hit with late fees if you want to make sure you make money and don’t lose money.
Make Money From Credit Cards by Utilizing the Interest Free Loan Offers
One of the sneakiest ways of making money with credit card loan programs is by taking advantage of the “Zero Percent (0%) Introductory Interest Rate.” You have to be careful with these and read the fine print, but if you are able to get approved for one of these with a high credit limit, it is almost as good as cash in the bank. Here is how this works:First, you have to apply for a credit card loan with a good company (Discover Card, Bank of America, CitiCards, American Express, etc.) Find an offer by shopping online and comparing offers. You specifically want to find one that offers both 0% interest on both purchases and balance transfers for as long as possible (1 year is great). Once you get approved for the card, you can immediately use it in one of 2 ways (or a combination of one of the two ways):
1. You can use the zero percent offer on purchases to buy merchandise all year. Use it for all of your purchases (groceries, gifts, entertainment, gas, rent, etc.). Then take the money you would have used to buy it, and place it in a savings account, a CD, or invest in stocks (or your own business). This way, you essentially free up your money, and you are using other people’s money at no cost to you. Pay the minimun interest charge each month, and do this until you will begin to get charged interest. At this point, you can either choose to pay interest for a while, or you simply pay off the balance in full.
2. An even more sneaky method, is to use balance transfer switch method. This is where you get a credit card with a 0% interest rate. Once you get the card, you get cash a convenience check, or some companies will allow you to place the money right into your checking account. The only thing you have to watch for is balance transfer fees. Some companies will tack on a 3% or higher fee of the total balance. So you must calculate this into the equation. But you can sometimes get money for free (no balance transfer fees, and no interest for a year).
So what do you do? You can apply for a zero interest (with no balance transfer fees) and request a convenience check or bank account deposit. Then you withdraw the money, and immediately invest in the safest high interest yielding account you can. So let’s say you get $10,000, and you invest that for 1 year into a CD that pays 5%. That would be an easy $500 for almost no work.
But wait, the trick doesn’t stop there. Once it comes time for the interest to be due, some sneaky people pull a “switch.” What am I talking about here? I mean they then apply for a card with a totally different credit company. When they get approved, they then transfer the balance (which should at this point be slightly less that $10,000 since they had to pay a minimum payment for a year) to the new card. BOOM, another year of interest free money. Rinse, wash, repeat.
There is no doubt that some sneaky people may have done this for years, and made thousands of dollars. Combine this with rewards you earn (if you use it for any purchases), and you are actually making money from credit cards.
The only downside is, you have to read the fine print! Know any fees you may pay, make sure the interest rate is in fact 0% and for how long. Also, it may have some kind of effect on your credit. However, I assume as long as you pay your bill on time it would lower any credit scores too bad.
